Husky Profit from High Oil Prices

Husky Energy Inc, the Canadian energy company controlled by Hong Kong billionaire Li Ka-shing, said third-quarter profit rose 65 percent as record oil prices offset production declines from offshore fields.

Net income rose to C$1.27 billion (US$1.05 billion), or C$1.50 a share, from C$769 million, or 91 cents, a year earlier, the Calgary-based company said today in a statement on MarketWire. The result beat by a penny the average estimate of seven analysts surveyed by Bloomberg.

Husky, which operates oil and natural-gas wells from Canada to Indonesia, benefited as the average price the company received for crude jumped 73 percent to C$105.57 a barrel. Husky got C$8.66 per thousand cubic feet of gas, a 67 percent increase. Chief Executive Officer John Lau plans to boost output by tapping crude deposits in Alberta's oil sands region and offshore Newfoundland.

Production fell for a fourth consecutive quarter to the equivalent of 355,900 barrels of crude, a 3.8 percent drop, the statement said. Husky's cash and cash equivalents climbed 80 percent to C$966 million.

In July, Lau cut his full-year production forecast by 5 percent to 7 percent after sea ice forced the shutdown of the White Rose field in the North Atlantic and the Tucker oil sands project got off to a slower-than-expected start.

Husky tumbled 21 percent this year, the second-best performer in the Standard & Poor's index of six Toronto-traded oil and gas companies. The stock has seven buy and five sell recommendations from analysts.

Among the 20 most-valuable North American oil companies, only Calgary-based Imperial Oil Ltd. and its majority owner, Exxon Mobil Corp., have higher returns on capital than Husky.

Li, who began accumulating a stake in Husky in 1987, in May predicted a year of record profit for the company. Oil reached a record $147.27 a barrel on July 11 and averaged $113.52 a barrel during the first nine months of this year, up 72 percent from the same period in 2007. The 80-year-old Li became Husky's controlling shareholder in 1991.

The announcement was released after the close of regular trading on North American stock markets.

Author: Jo Amey